Calculate and analyze profitability analysis of the company

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Reference no: EM131300996

Assignment

How is the project structured?

1. You have to choose TWO companies to analyze. These companies should be publicly traded and have at least one year of trading history and one set of annual financial statements (year 2011 or the latest) in New York Stock Exchange (NYSE) or NASDAQ.

2. The project will involve a three-yearcomplete analysis of financial statement for the companies that your group has chosen.

Required:

1) Calculate and analyze profitability analysis of the company based on:

a. ROA
b. ROCE
c. Do you find the profitability satisfactory? Comment on both the level and trend. Also comment on reasons that causes the changes as observed.

2) Calculate and analyze financial ratios used to measure the short-term liquidity risk.

a. Comment on liquidity risk of both companies. Also comment on reasons that causes the changes as observed.

3) Calculate and analyze financial ratios used to measure the long-term liquidity risk.

a. Comment on long-term liquidity risk (financial leverage and solvency risk) of both companies. Also comment on reasons that causes the changes as observed.

4) Calculate and predict bankruptcy risk for both companies using Z-Score.

5) Based on your analysis (from 1-4), compare the two companies' performance with that of industry. Comment which company is superior to the other.

Reference no: EM131300996

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